IN a radical departure from its core business, Wisynco Group Limited is poised to launch its own alcoholic beverages — including spirits and beer — for the first time, regulatory permits show, as the company weathers profit pressures from major infrastructure investments.

New environmental permits obtained by the Jamaica Observer confirm construction of “distillery, brewery and fermenting facilities” at Wisynco’s Lakes Pen Road complex — a strategic pivot for a firm currently distributing no alcohol. The move comes as the company financials reveal a 17.5 per cent year-over-year net profit decline to $971 million, attributed primarily to depreciation from “various plant expansions”.

Efforts to get comments on the entry of Wisynco into the alcoholic beverage market proved futile. However, the Business Observer can confirm that the company is in the final stages of commissioning a new state-of-the-art manufacturing plant that features a modern canning line and brewery, positioning Wisynco to introduce a wave of new beverage innovations to the Jamaican market. The commissioning of the plant comes with the company now marking its 60th anniversary of operations.

While it is not clear what type of alcoholic beverages will be produced at the new plant, the permit granted recently from the National Environment and Planning Agency (NEPA) suggests production of spirits such as rum and potentially other fermented products beyond just beer. It is understood all the brands of alcohol to be produced will be owned by Wisynco.

Wisynco has in the past flirted with distributing alcoholic beverages produced by Anheuser Busch, such as Budweiser.

“I think it was a little over a year ago, we had just about prepared to start doing some distribution for Anheuser-Busch. It was right as COVID was at its height and, we did a review of the business and decided between ourselves and Anheuser-Busch to put it on hold. At this point, they’re doing some business locally with a number of their brands, but I don’t know that they’re having a tremendous amount of success. So, I think the opportunities for us to expand in the beer business will be in the near future,” Mahfood told investors at the company’s February 2022 annual general meeting.

Its impending entry in the alcoholic market puts it in direct competition with Red Stripe, which is the island’s sole brewery and spirits producers such as J Wray & Nephew.

Financial Pressures and Strategic Response

The decision to enter the alcoholic beverage market comes at a critical financial juncture. Wisynco’s latest interim report for the period January to March (Q3) shows that while revenues have grown modestly by 4.8 per cent year-over-year, net profit has declined 17.5 per cent to $971 million, largely due to increased depreciation from substantial plant expansions. Selling, distribution, and administrative expenses have also risen, putting additional pressure on margins. The company’s leadership believes that the introduction of new revenue streams — such as alcoholic beverages—will help offset these pressures and improve the expense-to-sales ratio as the new fiscal year begins.

It has invested $2.77 billion on capital projects over the nine months from July 1, 2024 to March 31, 2025. That spending has brought its total investments over the last three years to $9 billion.

Looking Ahead

With the new plant now operational, Wisynco is set to roll out several new products in the coming months, ushering in a new era of Jamaican-made beverages that reflect both the creativity and quality the company is known for. As Wisynco continues to invest in local manufacturing and talent, its foray into the alcoholic beverage market is expected to reshape the competitive landscape and offer Jamaican consumers more locally crafted choices. The company has also been granted permission to expand its liquified natural gas (LNG) fuelled plant to generate electricity at Lakes Pen for the expanded plant.

From left are Andrew Mahfood, CEO of Wisynco Group, and William Mahfood, chairman.